Complexity Reduction: Cleaning House Without Sacrificing Innovation
This August 2010 Food Manufacturing column discusses product, raw material, and supplier rationalization and how F&B companies can implement this process within their organization.
As the mid-year economic reports on 2010 roll in, it is becoming more likely that we’ll continue to see slow market growth for several months or even years. The competition for tentative consumers during this time will place even more pressure on food and beverage (F&B) manufacturers to manage costs and improve operational efficiency—while still driving innovation. Those best positioned for both short-term and long-term success will be the F&B companies that can actively corral the complexity around these demands.
For the F&B industry, complexity is not merely a matter of raw materials or SKUs. It is an inherent part of the business structure resulting from product proliferation, merged operations, supply chains, and reorganizations. Failure to manage this complexity can paralyze an organization’s ability to drive innovation and growth. The key then is to maintain complexity where it matters and drive it out where it’s unnecessary.